WAL

• The Company’s main market risk is interest rate risk from lending, investing, and deposit-taking, with no material foreign currency, commodity, or equity price risk disclosed.
• ALCO governs interest rate risk, reviews exposures at least quarterly, and can adjust the balance sheet or use derivatives if modeled impacts breach board-approved limits.
• A +200bps parallel rate shock is projected to increase net interest income by 11.8%, while a -200bps shock would decrease it by 8.6%.
• Earnings-at-Risk modeling adds rate-sensitive non-interest items like mortgage banking income; total non-maturity deposits carry a weighted average repricing beta of 59%.
• Economic Value of Equity falls 10.5% under a +200bps rate shock and rises 4.4% under a -200bps shock, with both EaR and EVE within current limits at June 30, 2026.
• The Company uses fair value hedges (derivatives) to manage benchmark interest rate exposure, as detailed in Note 12.

In August 2025, the Bank initiated a lawsuit in Los Angeles Superior Court against Cantor Group V, LLC and certain individual guarantors in connection with the Bank's note finance revolving credit facility to Cantor Group V, LLC, alleging fraud by the borrower for failing to provide collateral loans in the first position, seeking appointment of a receiver and recovery of funds, and seeking other forms of relief and damages related to claims against the borrower. During the six months ended June 30, 2026, management reevaluated the existing collateral based on updated “as-is” appraisals and recognized a charge-off of $26.1 million from the previously established reserve. In May 2026, the Bank and its collateral agent filed an amended complaint in New York Supreme Court against Jefferies Financial Group, Leucadia Asset Management LLC, and affiliates (collectively, the "Defendants") alleging breach of contract, fraud, negligence, promissory estoppel, and unjust enrichment in connection with a trade finance loan extended by the Bank, seeking declaratory and injunctive relief for the recovery of funds, and other forms of relief and damages related to claims against the Defendants. This loan was secured by accounts receivable the Bank's borrower purchased from First Brands Group, which filed for bankruptcy in September 2025. During the six months ended June 30, 2026, the Company recorded a charge‑off of $126.4 million for the remaining loan balance. From time to time, the Company is involved in a variety of litigation matters in the ordinary course of its business and anticipates that it will become involved in new litigation matters in the future. 90

There have not been any material changes to the risk factors previously disclosed in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2025.